To sell my house because I want security at this age?

[burnth]

I’m 38. My mortgage is 270k, I pay 1k a month. Single and probably always will be (no desire for a relationship after some pretty awful ones…)

I had the house valued last week and it’s come back at 495k with a suggestion of marketing it at 525k.

I hate owing so much. Current term is 30 years so I will be 68 technically if it’s ever paid off. I will be gifted 50k later this year and may have some other inheritance down the line but who knows.

I want to buy somewhere with my equity and feel secure. All my family are saying it’s a stupid idea, that if I continue overpaying it will soon drop (I overpay 300 a month) and that in the longer run the house will make more money than a smaller one and I can downsize later on with more equity to either use or keep as savings.

I feel so confused. Most people I know don’t have a mortgage by now and this feels huge. Well it is huge. What would you do?

I'm in the same position and plan to do that in the next 5-10years

This is what I was thinking!! You must live somewhere very cheap or have a lot of rich friends

Unless you think realistically you will be having kids, I wouldn’t be living in a 4 bed house. Must be a nightmare to heat and clean. I’d downsize for that reason, even if you still have a small mortgage.

I think you may regret it you are very young - imagine in 10 years time the house you are in shoots up in value further another 100k plus you will kick yourself. By the time you sell now and pay all of the solicitors costs stamp duty on new property etc it won't be worth it.

why don't you have a look at the properties you can afford and see what is out there - may help make your decision.

I think you must be very unusual if most people you know have paid off their mortgages by 38! If you’d said 58, however…

But why on earth not downsize if it’ll make you feel more financially secure?

If you can find the sort of property you’d be happy to live in, where the difference in price would be well worth all the hassle, then do it.

I’m sure you’re aware, but do be wary of flats, esp. in blocks, where maintenance charges are likely to rocket - which is many of them.

Most people I know at 38 are going from their two-bed terrace to a three bed, semi, family home, so the opposite scenario.

Do what’s right for you. Can you compromise and get a slightly larger, small house, and a much smaller mortgage?

YANBU but you need to wait until 2026/27 to sell.

House prices fell in 2023 and continue to fall into 2024 with the market forecast to bottom out by the second half of 2024. House prices fell by 7% in 2023 with a further 4% fall in 2024 and are forecast to be back up to +5% within the next two years with further interest rate falls and affordability increasing.

This is a peak trough cycle and for you to downsize, you would be sensible to wait for the peak to sell your larger house on a stronger market. If you were upsizing I would recommend capitalising on the weak market we currently have however you will have much more buying power by taking your equity at peak.

If you can only downsize to a 2-bedroom house, then no, I wouldn't recommend downsizing now. A 4-bedroom house will always be wanted so you're sitting on a goldmine.

Don't look at your mortgage as a burden, look at it as a saving plan that you want to get the highest return on.

If the intention is to make money off your house, let the market do the hard work for you. It will raise in value whether you overpay or not. But to keep your options open why not lower your overpayment to £100 per month (so if you do decide to stay the mortgage comes down quicker) and put £200 into your pension (so you can retire comfortably regardless of whether you stay or sell up).

Plus you're only 38! Downsize in 10-15 years time if you have to, but I'd stay where you are... life can turn on a sixpence... it's better to have a 4-bedroom property with loads of equity than a 2-bedroom flat with nothing.

Yeah if you can buy a reasonable place and be mortgage free I would do it but then stick that 1k into a pension.

Think hard about where you could move to. We were mortgage free by 40 but it became clear to us that we had compromised too much on location. It was a nice area but too suburban (London zone 5). So a couple of years later we moved in a bit to a busier part (zone 3) still in the same general area of London. We didn’t sell the other property so had to take on a large mortgage in our early to mid 40s. I’m really glad we did despite the financial burden. 12 years later I’m on track to have the mortgage paid off before I’m 60, we have a great house and garden which is well situated for amenities as we get older.
TL:DR There is no point in becoming mortgage free earlier if it means compromises that outweigh the financial benefit

At your age I would make my goal living in absolutely my favourite location rather than having a big house if smaller met my needs. So maybe reduce your mortgage or down size but in the best area for you. I would think about what else you ll do with your money if not investing in property.

I'd do it if I were you. And plan some great things to do with the extra money you'll have each month.... travel, study, volunteer, do things you've always wanted to.

When you say a two bed would that be a flat? Don’t underestimate the change from a house to a flat if so. People above or below you, shared areas, rules, communal repair bills and service charges that you’re not in control of.

Agree that a middle option (3 bed house?) with small mortgage may be better.

What led to you buying the house in the first place, 4 bed house is an unusual FTB property?

Do it.

I'm mortgage free, have been for 12 months. It's liberating. I've now got options, I can go part time, I no longer fear redundancy, I'm investing and planning for retirement in a way I never could before (had a similar monthly mortgage).

Just make sure you do something with your spare grand a month and not fritter it away.

I would, not only would you be better off by £1000 a month you'd probably reduce your utility bills, council tax etc.
Think what you could do with that extra 1k, travel, enjoy life, not worry about money etc.
As a pp said I wouldn't buy a flat due to the closeness of neighbours, ground rent etc but definitely a two bed house with a garden, I love walking outside with a brew (wine😉)
For me it would be a no brainer

A 2 bed with no garden would be a drastic change if you are living in a house.

Remember that with a flat you will also be paying service charge and have to deal with the leasehold nonsense, which could be a pain especially when it comes to paying for communal works when/if needed.

Not to mention more neighbours can mean nuisance noise.

If I were you I would look at downsizing to a small house. Get a 2 bed house with a small garden and keep a small mortgage.

I did downsize by moving out of London 2 years ago and I now have a small terrace in a seaside town. That means a small mortgage still over 10 years but at least I have a lovely garden where I can grow my vegetables and enough space to work form home, keep my bike in the shed and so on. I can also have pets without worrying that the wording of the lease might prevent it.

Best of luck with whatever you choose to do.

You are extremely young, I would see how you feel at 45.

You can obviously afford the payments by over paying so much, I wouldn't make any hasty descion and see how you feel in a few years.

I think you're too young to do this too. Keep overpaying and you'll pay the mortgage off sooner, or sell up in 15 years time when you'll have more equity.

Also depends on what your retirement provision looks like - equity in a house can add quite a lot to your retirement income.

Firstly - Most people don't pay off their mortgage on their 30s so ignore your immediate circle

Secondly you are not in a hugely insecure situation- you are buying a home and if the worst happens you can sell and buy smaller - that option won't vanish

The longer you leave before selling the better your smaller home will be - if you ideally would have a 2 bed with off street parking it doesn't make sense to sell now - wait till the equity will give you that - else you may end up moving twice with all that costs

Live somewhere you love.

I've moved a lot & smaller houses are easier.

A smaller, nicer place may well appreciate more tho (no-one can say a bigger house is better) but given you need security not profit, move.

I would go and do some viewings on property you could afford and see if you can realistically see yourself living there. The idea is ok in theory but there will be a reason why you bought your current house and it may well be that the downsize is too much.

Friends of mine had the same idea as you but ended up buying something that was only £125k less than they sold for because they couldn’t face moving to a much smaller property. With stamp duty and other moving costs they can’t have saved much money.

That’s what everyone kept saying to us, but a bigger house, that’s your pension etc but we refused. Mortgage on our small house paid off fully in our 40s. Low council tax, running costs, cleaning etc. plenty holidays and treats, best thing ever. I went part time - more benefits than not! Do it!

Absolutely downsize and go mortgage free.

I've found that my menopausal body is not willing to get out and about and enjoy life. I will be knackered by the time I retire. In fife years.

So if I was to do it again I'd overpay or downsize, go part time, and enjoy my health and getting out and about while still fit and able to do so.

Most people you know don't have a mortage at 38? Bloody hell I'm 38 and have just bought for the first time 😭🤦‍♀️

This! Also think through the practicality of living in a smaller house when you have been used to space.

you are still young so you could live there for 50 years!

the space made a big difference to my life. I was in a small three bed house with a tiny box room, not storage and very little garden.

having a good sized home office and a good sized dressing room makes my home life much more manageable. I didn’t have a utility room before.

Having a peaceful, pretty garden to use every day in good weather, room to wfh and then close the door on work at the weekend and a place to manage laundry and organised my wardrobe has improved my quality of life.

also having room to entertain is fabulous.

before you downsize really think about how you use your current space and what you could lose. M

also you are early in your career. Are you likely to get pay bumps/promotions?

my circle of friends is a few years older than you - no one is mortgage free apart form the farmers with handed down houses! But most have moved to more expensive houses in their forties following career progression.